Data and Research March 8, 2019

Fewer Households Expected to Face Retirement Savings Shortfall

Just over four in 10 U.S. households are projected to run short of money in retirement, according to an updated analysis from EBRI.

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The EBRI Retirement Security Projection Model (RSPM) found that for 2019, 40.6% of all U.S. households where the head of the household is between 35 and 54 are projected to run short of money in retirement, down slightly from 42.3% in 2014.

In line with this, the aggregate retirement deficit of American households in this age cohort, including Social Security benefits, is estimated to be $3.83 trillion, down 15.9% from $4.44 trillion in 2014. However, when pro rata reductions in Social Security retirement benefits are assumed to begin in 2034, the aggregate retirement deficit increases by 6% to $4.06 trillion.

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On an individual basis, the average retirement savings shortfall for those between the ages of 60 and 64 ranges from $12,640 per individual for widowers and $15,782 for widows. For single males, it is $24,905 and for single females, $62,127.

Defined contribution (DC) plan eligibility has a significant impact. Individuals between the ages of 35 and 39 who have no future years of eligibility in a DC plan have an average retirement deficit of $78,046 per individual. This is more than five-times the $14,638 individual retirement deficit of those who have at least 20 years of future eligibility in a DC plan.

A 23% pro rata reduction in Social Security benefits beginning in 2034 would increase average retirement deficits by 17% for those currently between the ages of 35 and 39.

The results also find longevity risk can play a significant role in increasing retirement savings shortfalls. Those in the longest relative longevity quartile have a retirement deficit that is 10.2-times that for those in the shortest relative longevity quartile.

EBRI’s Retirement Readiness Rating (RRR), on the other hand, measures the percentage of households projected to not run out of money in retirement. In 2019, this rose to 59.4%, up 1.7 percentage points from 57.7% in 2014.

Break from the Grind March 7, 2019

A Little Friday File Fun

And now it's time for FRIDAY FILES!
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In North Tonawanda, New York, a man sponsored a $50,000 Super Bowl pool and put fake names in some of the squares hoping to win himself. However, that didn’t work and he found himself short of money to pay winners. So, what did he do? He staged his own kidnapping. Police were called by someone who said they saw him tied up in the back of a pickup truck. He claimed two people to whom he owed money kidnapped him for three days, took $16,000 from him and left him there. However, police said they were suspicious because the man didn’t show any signs of being upset and was very well-groomed.

 

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An experience in Georgia, gives us all a lesson about reading the fine print. A teacher there read the fine print in a travel insurance policy she recently purchased and won $10,000. St. Petersburg-based Squaremouth says it launched the secret contest February 11. Buried in the fine print was a promise of $10,000 for the first person to send an email to a specific address. Squaremouth says it’s giving another $10,000 to a children’s literacy charity, plus $5,000 each to the two schools where the winner teaches consumer economics. The teacher says the prize will fund a trip to Scotland with her husband to celebrate their 35th wedding anniversary.

 

In Silver Spring, Maryland, a pickup truck smashed backwards through a 7-11 storefront, then three masked men climbed over the debris and tried to load an ATM onto a hand truck they brought with them. They struggled with the ATM, and one suspect appeared less than helpful, drawing a punch in the arm from his partner, a video shows, according to station WTOP. They finally got the ATM out the door, but it fell off the hand truck onto one of the suspects. They also realized their get-away driver left them. So, they ran, but returned to get their hand truck.
If you must plow the snow, do so with pizzazz.

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Girl has a theory about how to grow a burger tree.

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A trick football catch.

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